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Wednesday, 25 February 2015

The rule of law, access
to effective remedies and protection of human rights in Swaziland continued to
deteriorate in the past year as a consequence of the further undermining of
judicial independence, Amnesty International said in its annual report.

‘Activists were also
detained and charged in several separate trials involving charges under the
Suppression of Terrorism Act (STA) and the Sedition and Subversive Activities
Act,’ Amnesty stated.

The report published
on Tuesday (24 February 2015) said the kingdom, ruled by King Mswati III,
sub-Saharan Africa’s last absolute monarch, revived a 2009 sedition charge
against Thulani Maseko. His trial on this charge was scheduled to be heard in
2015. A challenge to the constitutionality of the Sedition and Subversive
Activities Act, as well as the STA, was also pending in 2015.

Amnesty reported, ‘The challenge was
brought by veteran activist and leader of the opposition People’s United
Democratic Movement (PUDEMO), Mario Masuku, and eight others facing charges
under both laws in three separate trials. The application was due to be heard
in the High Court in March 2015.’

The trial of Mario Masuku
and youth leader Maxwell Dlamini was due to begin in February 2015. They were
charged with sedition and remanded in custody in connection with slogans they
allegedly shouted at a 2014 May Day rally.

Amnesty reported, ‘There
was considerable concern at Mario Masuku’s deteriorating health after he was
remanded into custody. At the end of October there was a renewed attempt to
secure his and Maxwell Dlamini’s release on bail. On 31 October the High Court
judge scheduled to hear the application was withdrawn. The application was
heard and rejected in November by Judge Mpendulo Simelane.’

Seven members of PUDEMO,
which is banned under the STA, were also facing trial at the end of the year on
charges under the STA following their arrest at the High Court during the trial
of Thulani Maseko and Bheki Makhubu in April, who were later jailed for contempt of court
for writing and publishing articles in the Nation
magazine critical of the Swazi judiciary.

Monday, 23 February 2015

King Mswati III of Swaziland has instructed the
kingdom’s revenue authority to pursue people who live lavish lifestyles to
ensure they are paying their tax.

The King, who is sub-Saharan Africa’s last absolute
monarch, himself has 13 palaces, a private jet and fleets of top-of-the-range
Mercedes and BMW cars. He and his royal family regularly take expensive
international trips.

The King pays no tax.

In a speech
opening the Swazi Parliament on Thursday (19 February 2015), the King said,
‘Time has
also come for the authority to fast track the programme of lifestyle audits.’

The source of much of King Mswati’s income remains secret. In
2009, Forbes magazine estimated that the King himself had a personal net fortune
worth US$200 million. Forbes also said King Mswati was the beneficiary of two
funds created by his father Sobhuza
II in trust for the Swazi nation. During his reign, he has absolute
discretion over use of the income. The trust has been estimated to be
worth US$10 billion.

In August 2014 the Sunday Times newspaper in South Africa reported King Mswati
personally received millions of dollars from international companies such as
phone giant MTN; sugar conglomerates Illovo
and Remgro; Sun International hotels and beverages firm SAB Millerto.

It reported that MTN, which has a monopoly of the
cell phone business in Swaziland, paid dividends directly to the King. He holds
10 percent of the shares in MTN in Swaziland and is referred to by the company
as an ‘esteemed shareholder’. It said MTN had paid R114 million (US$11.4
million) to the King over the past five years.

The newspaper also reported that the King was
receiving income from Tibiyo Taka Ngwane, which paid dividends in 2013 of
R218.1 million. The newspaper reported ‘several sources’ who said it was ‘an
open secret’ that although money generated by Tibiyo was meant to be used for
the benefit of the nation, Tibiyo in fact channelled money directly to the
Royal Family.

Meanwhile, seven in ten of Swaziland’s tiny 1.4
million population live in abject poverty with incomes less than US$2 a day;
three in ten are so hungry they are medically diagnosed as malnourished and the
kingdom has the highest rate of HIV infection in the world.

At the last national budget in Swaziland in 2014 the
King’s annual household budget increased by more than 10 percent to US$61m,
this was on top of the 13 percent
increase he had in 2013.

The AFP
news agency reported in May 2014 that the figure also included provisions
for construction work on palaces that would cost the tax payer about $12.6m.

Observers note that the King has had many chances in
the past to cut back on his spending and reduce the amount of money he takes
from his subjects, but so far he has increased his budget, rather than reduced
it. In 2011, as Swaziland hurtled towards financial meltdown, Majozi Sithole,
the then Finance Minister, in his budget demanded 10 percent budget cuts (later
increased further) from government departments, but in the same budget the
amount of money given to the King increased by 23 percent.

Friday, 20 February 2015

Newspapers in Swaziland lost their critical
faculties when they reported that King Mswati ‘would personally’ eradicate HIV
and AIDS in the kingdom by 2022.

The King made his
statement while opening the Swazi Parliament on Thursday (19 February 2015).

In a confused passage in his speech, King Mswati,
who rules Swaziland as sub-Saharan Africa’s last absolute monarch, said, ‘I
wish to assure the nation that I will personally see to it that the first world
Swaziland is HIV /AIDS free.’

Both the Swazi
Observer and the Times of Swaziland,
the kingdom’s only two daily newspapers, reported this to mean the King had set
himself a deadline of 2022; he has many times in the past said Swaziland would
be a ‘First World’ nation by 2022.

The newspapers reported the King’s promise prominently.
The Observer,
which is in effect owned by the King, reported,
‘There was unprecedented clapping of hands in the House of Assembly as His
Majesty King Mswati III assured the Swazi nation that he would personally see
to it that the First World Swaziland is HIV and AIDS free.

‘Ordinarily, parliamentarians and invited guests
shout Bayethe when the King sends a message they fully support, but the
gathering was besides itself as the King made this commitment.’

The Times,
a privately-owned paper, called it a ‘bold
declaration’. It added, ‘This means that the country will be free of the
epidemic in seven years’ time.’

The King gave no further information about how he
would achieve this goal. The newspapers reported the King’s announcement without
criticism. At present there is no cure for HIV, so it could be interpreted that
the King personally intends to find that cure.

With 26 percent of adults in the 15-49 age group HIV
positive, Swaziland has the world’s highest estimated prevalence
rate of HIV-infected adults. In addition, Swaziland’s tuberculosis (TB)
incidence rate is the highest in the world and 80 percent of TB patients are
co-infected with HIV.

The catastrophic
effect of HIV and AIDS on Swaziland's mortality rates has created a society
in which about 15 percent of the 1.2 million population are orphans and
vulnerable children, many of whom live in child-headed households.

King Mswati has a long history of unusual responses
to the HIV pandemic. In 2014, it was reported his kingdom would pay teenaged girls
E200 (about US$20) per month if they refused to have sex.

The South
African news organisation IoL reported Thabsile Dlamini, a health care
worker in Manzini, saying, ‘The government will pay girls the allowances so
they will have money to purchase necessities and can turn down money offered to
them for sex.’

In 2001, King Mswati banned ‘young maidens’ from having
sex for five years to halt the spread of HIV/Aids. Any man who contravened
the maidens' chastity rule was to be fined one cow.

Later, the BBC reported, ‘King
Mswati transgressed the ban when he took a 17-year-old girl as his ninth wife
just two months after imposing the sex ban in September 2001, sparking
unprecedented protests by Swazi women outside the royal palace.’

King Mswati III of Swaziland
has spoken publicly for the first time about the closure of the Ngwenya Iron
Ore Mine, but he did not say why he took US$10 million from the company that
ran the mine shortly before it went out of business or what he did with the money.

The King, who rules
Swaziland as sub-Saharan Africa’s last absolute monarch, said ‘The effect of
falling global prices of minerals, such as iron ore, was also evident in the
mining sector where production was halted in the last quarter of 2014,
following a plunge in international prices.

‘This problem has
affected many services which resulted in job losses.’

The King has been at the
centre of international attention after it was
revealed that he took a US$10 million loan from SG Iron (formerly known as Salgaocar
Swaziland) the company he awarded a licence to mine at Ngwenya. The King and Sihle
Dlamini, his personal representative on the board of
directors, were at the heart of events that led to SG Iron’s collapse.

It had debts of US$4 million when it was forced to cease trading in August 2014 and
more than 700 jobs were lost. King Mswati took the loan from the company less
than six months after it started trading which he refused to repay when the
company hit difficulties.

The King, through his representative Dlamini,
blocked the company from selling its iron ore, which meant the company had no
income. It had reserves stockpiled that could have fetched at least US$5.5 million
(more than enough to clear its debts) if sold when the company folded.

Despite repeated requests from SG Iron, the King’s
personal representative, refused to allow the ore to be sold.

A compensation
claim for at least US$141 million has been prepared by SARL against the Kingdom of
Swaziland at the International
Centre for Settlement of Investment Disputes (ICSID).

Thursday, 19 February 2015

Leading international lawyers are asking a United
Nations working group to rule whether the jailing of a Swaziland magazine
editor and human rights lawyer for publishing articles critical of the kingdom’s
judiciary are lawful.

They have filed a petition with the UN Working Group on Arbitrary Detention
(UNWGAD) in Geneva regarding the cases of Bheki Makhubu, the editor of the Nation magazine and Thulani Maseko, a
lawyer and writer.

The American Bar
Association’s Center for Human Rights, the global law firm Hogan Lovells and
the International Commission of Jurists (ICJ) jointly produced
a petition calling for the UNWGAD to issue an opinion regarding the lawfulness
of the continued incarceration of the two men.

They allege a range of human rights violations by Swaziland, where King Mswati III
rules as sub-Saharan Africa’s last absolute monarch..

Wilder
Tayler, ICJ’s Secretary General, said, ‘The consequences of this arbitrary
action against Thulani Maseko have not only violated his rights and exacted a
heavy personal toll, but have also highlighted the rule of law deficit in
Swaziland. Thulani Maseko has been denied his right to express an opinion on
public affairs and the administration of justice, guaranteed under
international law and affirmed in the UN Basic principles on the Role of
lawyers.’

Thulani Maseko and
journalist Bheki Makhubu were charged with two counts of contempt of court
emanating from articles published in the Nation
in February and March 2014, in which they questioned circumstances surrounding
the arrest of a government vehicle inspector.

They were sentenced to
two years of imprisonment, without the alternative option of a fine at the end
of a trial largely condemned by leading international rights groups as unfair
and not complying with international standards on the right to a fair trial.

In a statement the ICJ
said, ‘Some of the fair trial guarantees that have been breached, according to
the legal petition filed with the UNGWAD, include the right to be tried by an
independent and impartial tribunal; right to a public hearing; right to a legal
counsel; right to the presumption of innocence; right to bail; and right to
protection of the law.’

Marc Gottridge, partner
at Hogan Lovells, said,‘The use of contempt of court proceedings to suppress
the right to freedom of expression is a violation of international human rights
law. The right to freedom of expression is guaranteed in the Swazi constitution
and international law, including treaties to which Swaziland is a party.

‘The general failings of
the Swazi judiciary with respect to independence and impartiality makes it
reasonable to conclude that there cannot be an effective domestic remedy for
Thulani Maseko.’

In the latest in a long line of cases of physical
abuse of children at schools in Swaziland, a headteacher reportedly gave a boy
15 strokes of the cane after he was caught not wearing his necktie correctly.

The Times
of Swaziland reported the
headteacher Mayiwane High School Anderson Mkhonta ‘admitted unleashing 15
strokes to a Form 1 pupil’.

The newspaper reported, ‘Mkhonta says he gave the strokes
in intervals, as permitted by the law governing the administration of corporal
punishment.’

The Times said the headteacher accused the
boy of three offences: not tucking in his school shirt, not properly wearing
his necktie and for being seen outside class during lessons.

The
newspaper reported Mkhonta told the pupil that he would treat each of the
offences separately, stating that a certain number of strokes would be given
for each of the three offences and then he administered 15 strokes on the
pupil’s buttocks.

In October 2011, the
same group told
the United Nations Human Rights Periodic Review held in Geneva that
corporal punishment in Swazi schools was out of control. It highlighted
Mhlatane High School in northern Swaziland where it said pupils were ‘tortured’
in the name of punishment. It said, ‘Teachers can administer as many strokes
[of the cane] as they desire, much against the limit stipulated in the
regulations from the Ministry of Education.’

In a separate case, girls
at Mpofu High School were flogged by teachers on their bare flesh and if
they resisted they were chained down so the beating could continue. The girls
reported they received up to 40 strokes at a time.

In
another
case, a 10-year-old girl at kaLanga Nazarene Primary school was blinded for
life in her left eye after a splinter from a teacher’s stick flew and struck it
during punishment. And she was not the child being punished. She was injured
when her teacher was hitting another pupil, with a stick which broke.

Children at Emtfonjeni High School were
whipped with up to 10 strokes of a stick, because their school fees have
not been paid. A majority of the pupils at the school are orphaned and depend
on government to pay for their fees.

A
pupil at Mafucula High school was thrashed so hard that he
later collapsed unconscious and had to be rushed to a clinic. Six pupils were
thrashed with 20 strokes of a ‘small log’ because they were singing in class.
It was reported
that the boy who became unconscious was not one of those misbehaving, but
he was flogged nonetheless.

The principal at
Elangeni High, even publicly
flogs adults who date pupils at his school. The men are forced to attend in
front of the entire school, lie down on a bench and receive a whipping. The
girls are also flogged.

Thursday, 12 February 2015

The Swaziland human rights lawyer and journalist
Thulani Maseko has vowed that he will not seek bail pending an appeal of his
jail sentence for contempt of court because he has been imprisoned unjustly.

Maseko and Bheki Makhubu were arrested in March 2014
and subsequently jailed for two years after they wrote
and published articles critical of the Swazi judiciary in the Nation magazine.

Writing from his jail cell for the February
2015 edition of the Nation,
Maseko said, ‘I have refused to apply for bail because we are in prison for
expressing dissent and pointing out to an injustice. And jail time will not
change this fact. We are in jail not by mistake, but because of a clean and
clear conscience, and we are innocent of the crimes for which we have been
sentenced. Those who are keeping us in jail are the guilty ones; and I cannot
beg them for my release.’

He wrote, ‘As I concluded the statement of defense
from the dock on June 05, 2014, I said: “I do not, for a moment, believe that
in finding me guilty and imposing a penalty on me for the charge I face, the
court should be moved by the belief that penalties deter men from a cause they
believe is right. History shows that penalties do not deter men and women when
their conscience is aroused.”’

The jailing of Maseko and Makhubu sparked an
international outcry. Amnesty International named them ‘prisoners of conscience’.

The International Commission of Jurists (ICJ) in
a statement said, ‘The Court’s ruling and events that transpired before it
fall short of Swaziland’s international obligations to respect the rights to
freedom of expression and fair trial.’

It added, ‘The conviction of Thulani and Bheki shows
that the law as implemented in Swaziland does not adequately protect the right
to freedom of expression and that it unduly shields the courts from public
scrutiny.’

Kerry Kennedy,
President of the Robert F. Kennedy Center for Justice and Human Rights,
based in Washington, said in a statement, ‘This arbitrary decision makes a
mockery of justice and deals a severe blow to freedom of expression in
Swaziland. King Mswati III must act swiftly to reaffirm the rule of law in his
country and to ensure that his citizens’ fundamental human rights are
protected.’

King Mswati rules Swaziland as sub-Saharan Africa’s
last absolute monarch and appoints the judges in his kingdom.

Sue Valentine, Africa Program Coordinator of the Committee
to Project Journalists (CPJ) in Cape Town, said,
‘[The] ruling is an indictment of the thin-skinned Swazi judiciary that serves
a monarch and denies citizens the basic right of freedom of expression.’

Freedom House,
in Washington, called
the conviction a ‘show trial’. Jenai Cox, program manager for Africa
programs at Freedom House, said, ‘The judiciary has become an instrument of
repression, as King Mswati attempts secure his grip on power.’

Monday, 9 February 2015

Swaziland’s absolute monarch King Mswati III and his
personal representative Sihle
Dlamini were at the very heart of events that led to the collapse
of the mining company SG Iron at the Ngwenya Iron Ore Mine. It had debts
of US$4 million when it closed and more than 700 jobs were lost. King Mswati
took a US$10 million loan from the company less than six months after it
started trading which he refused to pay back when it hit difficulties.

A compensation
claim for at least US$141 million has been prepared by Southern Africa Resources Ltd (SARL), against
the Kingdom of Swaziland at the
International Centre for Settlement of Investment Disputes (ICSID).

SARL held a 50 percent
stake in SG Iron Ore Mining (PTY) Ltd (SG Iron), which had formerly been known
as Salgaocar Swaziland (PTY) Ltd. The Swaziland Government held 25 percent of
the shares and the King personally held 25 percent ‘in trust for the nation.’

The mine was forced to
cease trading in August 2014 after a series of events orchestrated by Sihle
Dlamini, who is Director Administration at the King’s Office and Assistant
Private Secretary to the King. He was also the King’s personal representative
on the SG Iron board of directors.

Here is a step by step
guide to what happened.

30
September 2010

SG Iron Ore Mining (PTY) Ltd. (when it was still
called Salgaocar Swaziland (PTY) Ltd), was registered in accordance with the
laws of Swaziland on 30 September 2010 under Certificate of Incorporation No.1196,
with its principal business of operations at the Old Ngwenya Mine, Ngwenya, in
the Hhohho district of Swaziland.

SG Iron’s stated goal was to reprocess iron ore
dumps left over by the Anglo American Mining Company in the late 1970’s, when
it ceased mining operations in the area, and to secure the main mine lease for
30 years once the iron ore dumps had been cleared.

Due to advancements in technology, it had become
scientifically possible to process the dumps and upgrade them into sellable
grade ore. This project would create new jobs in Swaziland, while creating a
new source of wealth for Swaziland, as well as clearing Swaziland of the dumps
left by the Anglo American Mining Corporation and restarting mining activities.

30
June 2011

King Mswati, who as absolute monarch in Swaziland has
sole control over mining rights in the kingdom, granted SG Iron a Mining Lease
for seven years. The company agreed to pay the King ‘in trust for the Swazi
Nation’ a royalty of 3 percent. It also gave the King 25 percent of the total
company issued share capital at no cost. It also gave a further 25 percent of
the issued share capital to the Swaziland Government, again at no cost. The
remaining 50 percent of issued share capital went to SARL.

The King holds shares ‘in trust for the Swazi
Nation’, but it is widely
reported outside of Swaziland that in fact he has
received millions of dollars from international companies such as phone giant
MTN; sugar conglomerates Illovo
and Remgro; Sun International hotels and beverages firm SAB Millerto, which he
spends on himself and his family.

The King, who rules over
an impoverished kingdom of only 1.4 million people, has 13 palaces, a fleet of
top-of-the range BMS and Mercedes cars and a private jet airplane. Meanwhile,
seven in ten of his subjects exist on incomes of less than US$2 per day.

As a general undertaking, the Mining Lease provided
that each party should ‘act in such manner as shall be necessary in order to
give effect to [the] Mining lease’. That mean they should all have worked to
make sure the company was a success.

It was agreed SARL, being the 50 percent shareholder
of SG Iron, had management control of SG Iron, which was in charge of, and
responsible for, day-to-day running of SG Iron. SARL was to provide all
financial support and technical expertise necessary for SG IRON to succeed.

Article 6.8 of the Mining Lease provided that the
Chairman in addition to having his own vote on the Board of Directors should have
a casting vote. Shanmuga Rethenam was appointed as the Executive Chairman of
the Board of Directors of SG Iron, and Sivarama Petla was appointed as its
Chief Executive Officer. Both Executive Chairman and CEO were nominee and
representatives of SARL.

Mbuso Dlamini was appointed as the Director for and
on behalf of the Swaziland Government and Sihle Dlamini was appointed as the Director
for and on behalf of the King.

SG Iron put up approximately US$50 million to start
the mining operations and added further capital. The King and the Swaziland
Government made no financial contributions.

21
October 2011

The official inauguration of operations was on 21 October
2011 with the dispatch of ore to Maputo Port in Mozambique. On 21 December
2011, the first shipment was carried out from Maputo Port and on 9 March 2012,
a rail services from Mpaka to Maputo Port, Mozambique, started.

16
April 2012

Less than six months after operations began, King
Mswati, through his representative Sihle Dlamini, asked for and received an
advanced payment / loan of US$10 million on the King’s future dividend. This
was at a meeting of the Board of Directors of Salgaocar Swaziland held in Mbabane, Swaziland, on 16 April 2012.
The money was to be repaid from future dividends
payable to the King.

There was no public
announcement made that the King received the money which he held ‘in trust for
the nation’ and it is not known how he spent it. This later fuelled speculation
that he had used the money to fund his own personal lavish lifestyle.

The company refused to
confirm or deny the gift. The Swazi Government was lukewarm in its denial. The Times of Swaziland reported, ‘Dismissing
the rumours, government Press Secretary Percy Simelane said “That is pure speculation. The donor has asked to remain anonymous and
it will be like that.”’

Sihle Dlamini, representing the King at SG Iron wrote
to the CEO of SG Iron, Sivarama Petla, instructing him not to sell any more
cargo on 21 August 2014. He did this without consulting the major shareholder,
SARL. Since that day all attempts by SG Iron to sell cargo were blocked.

Contrary to the terms of the Mining Lease, the Board
of Directors was not consulted about the decision to stop sales of iron ore.
The Chairman, who was to chair all board meetings under Article 6.7 of the
Mining Lease, and who also possessed a right of veto, was not even informed of
the King’s decision.

In October 2014, in a founding affidavit at the
Swaziland High Court to have the company placed under Judicial Management,
Sihle Dlamini would state that a shareholders dispute at SARL in Singapore had
made it impossible for management decisions to be taken at SG Iron. He also
stated that the fall in the world price of iron ore had made production at the
mine uneconomical.

After
21 August 2014

Blocking the sale of iron ore meant no trade could
take place and SG Iron’s operations were brought to an abrupt standstill. Since
no money was coming into the company from the sale of cargoes there was a
cash-flow crisis.

Sales could have resumed at any time because more
than 100,000 tonnes of iron ore remained at Maputo Port, Mpaka Railway Siding
and at the Mine Stockyard. In his High Court affidavit in October 2014,Sihle Dlamini revealed he had given
instructions for ore to be stockpiled until the price of iron ore recovered.

SARL also requested that the King repay the full or
part of the US$10 million loan / advance dividend to allow SG Iron to continue
operating. The King refused to do this, instead the King’s representative Sihle
Dlamini demanded that SARL inject more capital into the business, something it
would not do while shipment of cargoes remained blocked.

SARL would say in January 2015 that it felt it had
been held hostage by the King’s representative’s decision to unilaterally stop
all shipments of cargo.

22
September 2014

At a board meeting of SG Iron held in Mbanane, Sihle
Dlamini representing the King and Mbuso Dlamini, representing the Swazi
Government, expressed dissatisfaction at the status of the company, saying that
a shareholder dispute at SARL was impacting on SG Iron, something which was disputed
by SG Iron.

The two men gave an ultimatum that fresh funds
should be injected into the project no later than 26 September 2014. The
Chairman of SG Iron, appointed by SARL, was present at this board meeting, and
he requested that management allow the sale of the cargo, which would release
sufficient funds to keep the company operating.

SARL again requested that the King should, ‘for the
good of the company’s workers, its shareholders and the kingdom of Swaziland’,
repay the full or part of the US$10 million loan / advance dividend to allow
the continued operation of SG Iron. Sihle Dlamini, the King’s representative,
refused.

Subsequent to the meeting, Sihle Dlamini, representing
the King, asked SARL to wipe out the US$10 million loan.

29
September 2014

In a letter dated 29 September 2014, SARL refused to
write off the King’s debt. SARL said in January 2015 that in response to this, Sihle
Dlamini took a unilateral decision to stop operations and place the company
into Judicial Management and then liquidation. This decision was taken without
discussions with the major shareholder or considering the voting rights in
place at SG Iron.

3
October 2014

Sihle Dlamini representing the King and Mbuso Dlamini,
representing the Swaziland Government, called for a meeting of the Board of
Directors and despite being told by the Chairman of the Board Shanmuga Rethenam
that he could not attend, they went ahead with the meeting without him.

This was the first Board Meeting that had been held without
the Chairman’s presence in the history of SG Iron. Sihle Dlamini, the King’s
representative, served as the Chairman of the meeting, although he represented
only 25 percent of the company’s share capital and SARL, the 50 percent
shareholder, was supposed to have control of the board.

Sihle Dlamini and Mbuso Dlamani both resolved to
place SG Iron under Judicial Management, without seeking the Chairman’s consent,
rather than permitting operations and cargo sale to continue.

10
October 2014

SG Iron was
placed under provisional Judicial Management by an Order of the High Court of
Swaziland dated 10 October 2014. This order was based on the founding affidavit
of Sihle Dlamini, the King’s representative. The Judicial Manager was able to immediately
take control
and assess the affairs, assets and liabilities of SG Iron.

In his statement, Dlamini said the company,
‘commenced operations on the 21st of October 2011 and it has been extremely
successful to date and has been a major income earner for the Kingdom of
Swaziland.

‘[It] has also provided a number of investment
opportunities to local transport contractors, construction companies and heavy
plant and machinery contractors who carry out the bulk of its mining operations
at Ngwenya.’

He added the company, ‘is not in an insolvent position
in that its assets exceed its liabilities’. He said, however, the Board of Directors
had ‘become hamstrung’ and was unable to take effective decisions on the
operations of the company.

He said, ‘During or about December 2013, a serious
shareholder dispute arose between the shareholders of the investor SARL, which
dispute has resulted in arbitration proceedings being instituted between
themselves in Singapore.’

He said he was not, ‘fully apprised of the nature of
the dispute’, but nonetheless believed it meant that SARL representatives on
the Board of SG Iron were unable to take decisions.

Sihle Dlamini also said that the falling price of
iron ore had impacted the company. He said the price fell from E1,360 (about
US$136) per tonne in January / February 2014 to E550 (US$55) per tonne. This
was a new six-year low of the price of iron ore.

‘It also effectively meant that the cost of
processing the ore now at the present moment exceeds the price that [SG Iron] is
able to obtain for the ore on the international market. In other words, it has become
financially impossible to continue to mine.’

He stated, ‘Currently, as at 30 September 2014 [SG
Iron’s] total indebtedness to its creditors amounted to approximately E42
million (US$4.2 million). Although that amount seems large, [SG Iron] would
very easily be able to pay these creditors if it were in a position to sell the
product that it currently has and more so if the price of iron ore recovers.’

However, he did not report that even at the lowest
price of US$55 per tonne, if he himself, as the King’s representative, were to
permit the 100,000 tonnes of ore stockpiled to be sold it would raise US$5.5
million, more than the US$4.2 million SG Iron owed its creditors.

In his statement, Sihle Dlamini made no reference to
the US$10 million loan that had been made to the King that he subsequently
refused to pay back.

16
December 2014

On the request of the Judicial Manager appointed by
the Court, the Court ordered the provisional liquidation, or winding up, of SG
Iron by an Order dated 16 December 2014.

22 January
2015

A Notice of Investment Dispute from SARL prepared
for the International Centre for Settlement of Investment
Disputes (ICSID) on 22 January 2015 stated the Judicial
Manager, who it said was controlled by the King through Sihle Dlamini and Mbuso
Dlamini, informed all creditors / vendors of SG Iron of its provisional
liquidation, but failed to inform its largest creditor and primary shareholder,
SARL, in writing of the event. He also failed to inform Eltina Limited, a major
creditor of SG Iron, who bought the cargo of SG Iron and had provided US$10
million as a loan to SG Iron.

SARL reported. ‘The Judicial Manager met with [Sihle
Dlamini and Mbuso Dlamini] the Director representing the King and Government
almost every day and took instructions only from them’, not the SARL directors,
or Eltina Limited.

SARL reported, ‘[SARL] should have been given the
opportunity to put forward their case before the Judicial Manager, since there
were numerous alternatives to revive the company, in a violation of their due
process rights they have not been allowed to do so by [the Swaziland
directors].’

SARL added the Judicial Manager, ‘acting solely on
the instructions of [the King’s] representatives, wholly failed his duty’, and
when SARL and Rethenam, as Chairman of SG Iron, asked to sell cargo at a higher
price even to its own competitor, the Judicial Manager ignored this request.

‘The only possible explanation for his refusal was
that [the Swaziland representatives] knew that, if a cargo was sold, the company
would receive cash flow and SG Iron could not be liquidated.’

The closure of the mining project cost 700 people their
jobs in Swaziland and it was estimated that several hundred jobs were also lost
at the Port of Maputo, Mozambique.

SARL also reported that it had ‘direct evidence’
that the mine was being guarded by the Umbutfo Swaziland Defense Force.

‘[King Mswati III] is the Commander-in-Chief of the
Umbutfo Swaziland Defense Force, providing further evidence of the wholesale
expropriation of [SARL’s] investment by state organs of [Swaziland] including
the King’s Office, [Swaziland’s] judiciary and [Swaziland’s] military,’ it
stated.

SARL added that as a result of SARL’s closure its ‘investment
has been expropriated’, and the King’s US$10 million dividend / loan ‘has been
written off by judicial decree’.

SARL added, ‘Having expropriated [SARL’s]
investments and avoided the repayment of US$56 million in loans to finance the
investment, it is understood that the Judicial Manager is now attempting to
sell SG Iron to third parties for a song.’

The notice stated it had ‘suffered direct harm in
the amount of no less than US$141,147,440.17, for the direct financial
consequences of the behaviour of the King and his representatives.

In addition it is claiming US$57,186,022.53 for its
advance and loan owed by SG Iron to SARL. SARL also stated that Eltina Limited was
owed US$5,426,954.66.

In its notice of investment dispute, SARL said the
order from Sihle Dlamini issued in August 2014 that no more iron ore should be
sold was ‘a deliberate attempt to create an artificial cash crisis’ at SG Iron in order to gain
control of the company and expropriate the company of its investments.

SARL linked the move to destroy the company to 6
April 2012 when the request was made by King Mswati III, for the US$10 million
loan.

‘It appears to be the desire to avoid the repayment
of this advance dividend / loan to HMK [His Majesty the King] that lies at the
root of the expropriation of [SARL’s] investments in Swaziland,’ SARL stated.

1
February 2015

The Observer
on Sunday, a newspaper in Swaziland, in effect owned by King Mswati,
attacked SARL and its Notice of Investment Dispute. It quoted Sihle Dlamini,
who called the notice ‘a smear campaign’. He also likened SARL to ‘terrorist’
organisations.

Following publication of this article, William Kirtley, attorney to SARL, wrote to the Observer, to say, ‘The only person who stood to gain anything from
this was HMK [the King], since the joint venture had provided an advance
payment / loan ofUS$10 million and,
indeed, during one of the final board meetings it was repeatedly requested that
this be written off SG Iron’s books.’

8
February 2015

The Observer on Sunday,
part of the Swazi Observer group of newspapers, in effect owned by King Mswati
and described by the Media
Institute of Southern Africa in a 2013 report on press freedom in the kingdom as ‘a
pure propaganda machine for the royal family’,attacked
SARL and said it was, ‘lying by claiming to have filed a notice of
arbitration with the International Centre for Settlement of Investment Disputes
(ICSID) against the Kingdom of Swaziland’. It said it had proof that no such
notice had been lodged.

In fact, SARL had never claimed to have ‘filed a notice of arbitration.’
In a
media release dated 29 January 2015, it was announced SARL had
submitted ‘a notice of investment dispute’.A notice of investment
dispute is first filed to see if the amicable resolution of a dispute is
possible. Only when it is clear that the
amicable resolution of a dispute is not possible is the ‘Notice for Arbitration’
filed.